An assessee is paying monthly rent of Rs.150000/- and deducting TDS also. The landlord is sending him two separate bills , one for Rent and one for Common Area Maintenance charges. The maintenance charges are 3000/- p.m. which comes to total 36000/- for the year and which does not exceed Rs.50000/- for the year. Will maintenace charges subject to TDS...?
3 Replies
Amir
(Learner)
(4016 Points)
Replied 05 January 2010
Dear Lalit Mohan,
The true test in this case would be whether Contract for Maintenance is separable from rent agreement or not...
Case 1 TDS WILL BE CHARGED U/S 194 C AS SEPARATE CONTRACT
In following two cases Contract for maintenance WILL BE SEPARABLE
1) Contract for maintenance is optional OR
2) Tenant can give contract to a person other than Landlord
CASE 2 TDS WILL BE CHARGED U/S 194 I ALONGWITH RENT
Other than above cases Contract for maintenance will be termed as INSEPARABLE and TDS WILL BE DEDUCTED AS RENT..
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